Self-esteem affects every area of a person’s life. With low self-esteem comes discouragement, relationship problems, and even health issues. Of course, the opposite is true, too: A positive self-image stimulates creativity, a can-do attitude, and better physical well-being. One of the best ways to boost your self esteem is to achieve financial freedom from debt.

Whether your debt comes from an investment like that enviable college degree, a splurge vacation, or hardships in your past, it can effect your self-esteem negatively. Believe it or not, debt actually improves the self-esteem of young people, according to Ohio State University sociologists Rachel Dwyer and Professor Randy Hodson. However, around the age of 27 when the responsibilities of life start to catch up, the heavy burden of debt takes a toll on these same respondents.

The Vicious Cycle

Getting down on yourself doesn’t happen overnight. And usually, getting out of debt takes time, too. The key is your daily habits, and that starts with mental patterns. According to the Mayo Clinic’s Mental Counseling team, once you’re aware that debt is triggering your low self-esteem, these steps can help you reverse the cycle.

• Adopt hope. Encourage yourself by being kind. Negative self-talk can turn into a self-fulfilled prophecy where you prove yourself right, so reverse those mental habits. Say to yourself, “This debt is huge, but so is my determination. I bet my new budget can get the job done.”

• Go easy on yourself. You might have blown it, and if you did, welcome to the club. Everyone makes a bad choice here and there, so don’t beat yourself up mentally. Channel that energy toward your debt. Tackle temptations instead of your own character. Remember, mistakes are not a reflection on you, so avoid thinking less of yourself when looking at old loans.

• Replace “should” and “must” with “can.” Unrealistic expectations come from a spirit of judgment, which can be toxic. Instead of “I must cancel my email subscriptions to online shopping,” say to yourself, “With my new spending habits, I can probably live without all those ads in my inbox.”

• Count your blessings. Focusing on the positive parts of life will remind you what’s most important. Cultivate thankfulness for the things that go right, whether or not they’re in your control. Keep a list of achievements, however small, to look back on when feeling negative. “Since the warmer temperatures arrived, I left the windows open to avoid heating or air conditioning bills for 2 whole months. Instead of splurging with that cash, I put it toward my debt, and now I’m looking for other ways to make extra payments!”

• Reassign negative thoughts. Your cycle of negative self-talk will not die easily, and that can be discouraging. Fight the temptation to get discouraged when the negative thoughts make their appearances. Instead, use those as mental cues to reroute that energy. Ask, “What can I do right now to turn this mental course around?” A simple review of the above steps can help immensely. Financial freedom isn’t impossible, as long as negative thinking is handled appropriately.

Changing your self-image through external factors like your appearance or philanthropic activism may have immediate benefits, but digging yourself out of a place of debt takes a long-term approach, and the rewards are more permanent.

What about you? How has your self-esteem been affected by debt or financial freedom? Leave a comment or tell your story below.

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The team at CESI is committed to helping you make wise financial decisions and to helping you understand how to get out, and stay out of debt.  For a free debt analysis, contact us and find out how we can help.